VaxGen Inc. said Wednesday that preliminary results from a late-stage clinical trial in Thailand using its experimental AIDS vaccine showed that inoculations failed to protect people from getting HIV.
VaxGen, based in Brisbane, Calif., did not meet its main goal of preventing HIV infection or its secondary goal of slowing the progression of the disease among those who received the Aidsvax vaccine but later became infected with HIV.
VaxGen is seeking money from the U.S. government and philanthropic organizations for further development of an HIV vaccine, company spokesman Lance Ignon said. VaxGen said in February that the vaccine didn't help prevent infection with HIV in an earlier trial.
The company, which has been struggling to make a profit and is depending on manufacturing agreements and biodefense contracts to make money, received an $80.3-million grant from the federal government in September to develop an anthrax vaccine.
"It's hard to believe that anyone anticipated this trial was going to be a success," said Sharon Seiler, an analyst at Punk Ziegel & Co., who rates VaxGen "buy" and owns its shares. "The company has made a huge effort to diversify, even prior to the announcement of the results from the first trial."
Shares of VaxGen dropped 46 cents to $9.39 on Nasdaq. They have lost more than half their value this year after Aidsvax failed in the first study.
VaxGen is the only company to hold large-scale trials of a vaccine, and the failures mean that any inoculation against HIV, the virus that caused AIDS, may be years away. The disease killed more than 3 million people worldwide in 2002, according to the United Nations.
The latest trial was designed to evaluate the safety and efficacy of Aidsvax, mainly against blood-borne transmission of HIV subtype E and one strain of HIV subtype B. The subjects were 2,546 injecting drug users in Bangkok. During the 36-month trial, 105 people who received a placebo became infected with HIV compared with 106 who got at least one Aidsvax injection.
More than 5,000 people participated in the first Aidsvax trial, which was conducted in the U.S., Canada, Puerto Rico and the Netherlands.
VaxGen said it had $14.6 million in cash and investment securities at the end of the second quarter. The company has delayed the release of its third-quarter financial results as its auditors review accounting of some stock warrants.
Bloomberg News and Reuters were used in compiling this report.